Microsoft is addressing the other forms of piracy with other
initiatives such as Certificates of Authenticity (COA) that
accompany new PCs with genuine licenses, edge-to-edge holograms,
education campaigns and, as needed, enforcement efforts.

Product Activation keeps users from changing or upgrading their
hardware.

Not true at all. Users can change or upgrade their hardware.
One of the forms of piracy that Product Activation guards
against is hard disk imaging. Not all forms of hard disk
imaging are illegal. In the case where a pirate copies data
from one PC hard drive to another to illegally run the software
on two PCs, Product Activation stops that by forcing the
copied software to be reactivated. It does so by comparing
the hardware on which it was activated to the hardware on
which it is now being booted. If the hardware is substantially
different, then reactivation is required. If it is the same
or similar, then the software will continue to work. Those
who upgrade their PC's hardware substantially may be
asked to reactivate. Reactivation for this reason is easy
and can be completed by contacting Microsoft to obtain another
confirmation ID.

Product Activation changes the way Microsoft software is licensed.

The underlying principles of Microsoft's software licenses
have not changed. Microsoft's end user license agreements
have always stipulated the number of PCs that software can
be installed on. Product Activation does not change that.

Volume Licensing and Activation

Qualifying as a volume licensing customer is easier than many may
think. Customers can qualify for Microsoft's Open Licensing
program by purchasing as few as five licenses. More information
on Microsoft Open Licensing and Microsoft's other volume
licensing programs can be found at the business licensing Web
site. It's important to understand that Volume License Agreements
do not cover the full Windows Client operating system; Volume
License provides for Windows Client upgrades only. Customers
must first have a qualifying underlying operating system license
before installing Volume License software on their computers.
Those who acquire software licenses through one of Microsoft's
volume licensing programs will not be required to activate those
licenses. Microsoft understands the unique deployment requirements
of businesses that need to acquire licenses in volume and provides
product that does not require activation to those customers.